Estate agents in Portugal now believe the market is stabilising, having experienced several years of falling prices. Immediately after the financial crisis prices dropped by up to 30%, but last year the market began to correct itself. Property prices for luxury homes dropped considerably less, falling by 15% to 20%. This is probably due to the fact that wealthier buyers are less likely to have mortgages, while others reliant on funding would have found it more difficult to obtain a loan due to tighter lending restrictions.
Luxury apartments in the centre of Lisbon currently cost between €5,000 and €6,000 per square metre, while apartments in less upscale neighborhoods currently go for around €5,000 per square metre. Older apartments in Amoreiras are likely to cost between €3,500 and €4,000 per square metre, while newer apartments could cost as much as €5,500 per square metre. The Estoril Coast, just half an hour’s drive from Lisbon is popular amongst surfers and for its casinos. Apartments here can cost as much as double as those in the city.
Most overseas buyers are looking for property in Lisbon or the Algarve, and around 60% of buyers in the Algarve are international. Most are from Britain, although the area is also popular with buyers from Spain, Italy, Scandinavia and Germany. The market in Lisbon is a little different, as it’s not so heavily dominated by the British, and just 15% of the property is sold to overseas buyers. Purchasers include those from Western Europe and Russia, as well as buyers from Angola and Brazil, as these countries are Portuguese speaking.